Cape Town – Eskom CEO Brian Molefe has done the right thing by resigning as it would be inappropriate for him to lead the power utility when the judicial inquiry is launched into the former public protector’s State of Capture report, according to EE Publishers MD Chris Yelland.
“Former public protector Thuli Madonsela’s report has revealed deeply suspicious circumstances and has ordered these be investigated further through a judicial inquiry,” he said
“In the circumstances, I believe Mr Molefe has done the right thing by resigning.”
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He said while the African National Congress and government might take the report on review, he believes the courts will simply recommend a judicial inquiry to investigate the matter.
In such a situation, Molefe’s conduct would be placed under the microscope.
In her report released on November 2, Madonsela revealed that almost R1bn worth of prepayment by Eskom to Gupta-owned Tegeta Resources & Energy for a coal tender to supply Arnot Power Station was allegedly used to buy Optimum Coal Mine (OCM) from Glencore and may be corrupt, illegal and amount to fruitless and wasteful expenditure.
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Madonsela said Glencore appears to have been severely prejudiced by Eskom’s actions in refusing to sign a new agreement with the company for the supply of coal to Hendrina Power Station.
“It appears that the conduct of Eskom was solely to the benefit of Tegeta in that they forced the sale of OCH to Tegeta by stating that OCM could be sold alone,” she said. “Thereafter, it appears, they have allowed Tegeta to proceed with the sale of a portion of OCH in the form of the Optimum Coal Terminal."
In his resignation statement on Friday, Molefe said Madonsela’s "observations" are “inaccurate, based on part-facts or simply unfounded”.
“She has … determined on recording ‘observations’ without, in crucial respects, putting intended harmful disclosures to me first - as she was by law required to do. She has effectively deferred my constitutional right to be heard to a future date, and to a further body, which she has ordered others to assemble.”
READ: TIMELINE: Brian Molefe's career so far
Eskom board chairperson Ben Ngubane said last Friday that it would be Madonsela’s fault if Molefe resigned.
Yelland said Molefe’s departure as CEO would introduce new uncertainties around the nuclear programme as well as the renewable energy programme.
“It will introduce a period of uncertainty while next CEO is appointed and takes a position,” he said.
Yelland didn’t believe Matshela Koko, head of generation at Eskom, would succeed Molefe.
“I doubt Mr Koko will be the next CEO,” he said. “I think he is somewhat compromised as he faces a Constitutional Court ruling over the Areva/Westinghouse tender, which was a R5bn contract.
“If the ConCourt upholds the Supreme Court ruling, Mr Koko will face difficult circumstances,” he said.
The contract award, said to be the biggest that has ever been disputed in a court of law in South Africa, includes the replacement of six steam generators at Eskom’s Koeberg nuclear power station in the Western Cape.
Eskom and Areva say the steam generators are approaching their end of life, and that it is critical that they be replaced during the normal reactor refuelling and maintenance outages in 2018 (known as the X23 outages), according to Yelland.
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